Financial Literacy Month might be wrapping up but our work is far from over.
Today marks the end of Financial Literacy Month, and what a month it’s been! It kicked off with Credit Education Week early in the month and the momentum continued to build from there. Financial leaders from across the country, near and far, came together to make a difference for all Canadians by giving them the financial tools they need for success, whether that’s budgeting know-how, money tips and insight, or advice on managing (and eliminating) debt — and this information couldn’t have come sooner.
A recent study released by the Organization for Economic Co-operation and Development (OECD) indicated that Canada’s household debt has continued to rise while other countries included in the study have been able to decrease their household debt over time, making Canada world leaders when it comes to debt — a title no one should be proud to hold.
Now, more than ever, Canadians need to incorporate money and debt management into their everyday finances. That’s why initiatives like Financial Literacy Month and Credit Education Week are so important to our country’s families and their future — and you can never start too soon. Every year, Credit Education Week hosts an essay contest in which winners are awarded scholarships for their post-secondary education. This year’s grand prize winner, Adam LaBrash, illustrates why financial literacy is important at all ages.
What Was The Dumbest Thing I Ever Did With My Money?
Submitted by Adam LaBrash
Although I was fortunate that my family never struggled financially, I was still taught the value of money from an early age. Therefore, my lack of insight and common sense are not qualities I’d normally brag about — the list of my monetary blunders is too long to be funny. That said, I can’t help but feel an odd sense of pride in the unique and extravagant ways I have wasted my money.
Fortunately, my most considerable financial blunder occurred when I had the excuse of my youth to not know better. As a 10 year-old, money was hard to come by. Primarily behaviour-based, my allowance was an intermittent source of funds at best. Between the exorbitant price of video-games, and junk-food inflation, my savings dissipated rapidly. I was desperate for a new source of funding. Unfortunately, due to repeated previous misallocations of capital, potential investors — my parents — were unmotivated to invest. Unfortunately, work was hard to come by, few jobs existing for an unqualified 10-year-old, even less existed with competitive pay-rates. Regardless, I was set on restoring my meager fortune.
Although lacking liquidity, I still owned a great deal of property. My financial advisors had long told me to shed these old acquisitions because they were “collecting dust” and “no one played with them anymore.” My response was to begin selling off my old toys, and replace them with new. I collected the old boxes from my garage and explored the darkest corners under my bed. Collecting a colossal pile of abandoned items I convinced my parents to let me have my own stand at my family garage sale. I soon discovered how easily parents will part with $5 to placate their screaming child.
Looking back, this is the part of the story that makes me proud; I worked hard and effectively to earn my money. I identified my client demographic and modified my business plan to attract them, even investing in popsicles to attract the children to my table. Of course, it was only $5 to the parents, but it was a rapidly growing fortune for myself. Money started piling up — a toonie here, a fiver there — and soon became more money than a 10 year-old could spend. I remember pouring out my jar on the bedroom floor and being awed by my wealth. My naive mind wondered why my parents did not utilize the lucrative toy-selling industry like me. Soon enough I would discover the power of cheap money.
I was buying a chocolate bar from the vending machine and I offered to buy a lingering classmate one as well. I had a few extra bucks, so why not? Almost instantly, I had placed a magical charm on him; his eyes lit up, grin widened and he was miraculously my new best friend. Although his reaction was artificial, I loved the attention nonetheless. I wanted everyone to be my friend, and I had the pile of cash at home to make it happen. My popularity at school skyrocketed. I was like a newly drafted professional athlete. After spending my life in a difficult financial situation, I was now rolling in dozens of dollars I could not spend fast enough. Pack of bubble gum? Mine. New game? No problem. Movie? If Mom approves, certainly.
People I never talked to wanted to be my friend; girls pulled my hair at recess; and I always had a golden ticket to the front of the line at recess. Most suckers my age had some sort of allowance, but not me; I was self-made and not afraid to show it. Some people peak in high school, I peaked in Grade 4. Using my newfound wealth, I climbed the social ladder, more popular every day.
Of course, with more money came more problems. I began hanging with the wrong group of kids and was consuming way too much sugar. Of course, I continued to sell my possessions to pay for the needs of my entourage and to satisfy my sweet tooth. Eventually, I ran out of items to sell. My days of wealth were intense but short-lived. Once my income was cut off, my house of cards came crumbling down. My first blunder had been flaunting my extra spending money. My next mistake was allowing people to take advantage of me to the tune of nearly $50 (a fortune when adjusted for inflation and the perspective of youth). I thought all along these kids were the suckers but it was me paying for everyone’s lunches.
The wealthy people in my life have constantly reminded me that the best things in life are free. Now, this may be true, but the okay things in life cost money, and on a slow Sunday afternoon in the middle of July, any mediocre toy would have entertained me. Yet, I had sold everything of value, and my entourage was nowhere to be found. My reckless binge hit me like a bag of bricks. Looking back, my blunder was not simply one poor financial decision, but a slippery slope of selling and spending, leaving me broke. My identity had revolved around my pocket change and I had become as fake as my new friends.
In retrospect, this experience was a blessing in disguise. I learned the value of money at a young age, and how — even in small amounts — it can influence those around me. I discovered how quickly little purchases can add up. Purchasing a chocolate bar a day doesn’t seem like much, but soon enough, a week later that’s $14 spent – a significant portion of my net worth at the time.
In the end, I think it was better to blow $50 as a child, than say $10 000 learning the same lessons as an adult. Now, as a young adult, I don’t have to relearn these lessons. I already know that money often attracts the wrong people, that healthy relationships aren’t dependant on finances, and that chocolate bars can be ridiculously expensive.